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When it comes to rewards credit cards, I believe that the more competition- the better. With more players in the marketplace competing for the same crowd of creditworthy consumers, we’ve seen sign-up bonuses and promotions increase drastically over the last 5 years. There could be another player in the mix soon: Wells Fargo. This week American Express and Wells Fargo announced that they would be launching a partnership to bring Amex credit cards to Wells Fargo’s 70 million customers.
Wells Fargo is the nation’s fourth largest bank in terms of assets with the largest branch network in the US. However, although the bank is the country’s seventh-largest issuer of general-purpose credit cards in the country, only one third of its customers carry a Wells Fargo credit card. Although Wells Fargo currently has a relationship with issuer Visa that is still in place, the bank and American Express both sensed a huge opportunity to issue Amex’s line of credit cards to Wells Fargo’s enormous customer base.
Wells Fargo plans to make the new cards available nationwide by mid-2014 although they also announced they would be launching a targeted pilot program in select US markets later this year.
Customer loyalty and credit card benefits are part of the motivation behind the deal, according to the head of Wells Fargo’s Consumer Lending Group, Avid Modjtabai, who said, “We want to give the customers who already carry our card – and the ones who don’t yet – greater rewards and benefits for having a Wells Fargo card in their wallets.”
Although Wells Fargo currently has a rewards program that includes options to redeem points for cash back, gift cards, merchandise and travel experiences as well as an online shopping portal with bonus earning opportunities, it looks like LoyaltyEdge and Amex will be helping to design a new, more sophisticated Wells Fargo loyalty program where rewards will include merchandise and gift cards. There was no specifc mention of travel rewards or airline or hotel partners, but I’d love to see them create a new transferable points program or at least team up with travel brands that don’t currently have a travel cobranded card, like Four Seasons or Kimpton.
Based on the information available, I suspect we’ll see a suite of cards and a fixed-value rewards program that looks a lot like Capital One Venture Rewards or Bank of America World Points where you earn a set number of points or miles per dollar and then can redeem them at rates of 0.5-1 cent apiece for cash back, merchandise or gift cards, and potentially for statement credits for travel, though that wasn’t specifically mentioned in any of the announcement information.
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While I’d be more excited to see some of the new Wells Fargo cards offering co-branding opportunities with hotels and airlines, or even transferability to travel partners, at least this is a step in the right direction for Wells Fargo and will create more opportunities to earn and redeem points for its huge roster of customers. Even after the introduction of the Chase Sapphire Reserve, the Chase Sapphire Preferred is still a fantastic choice if you want to avoid the Reserve’s $450 annual fee, earn 2x on all travel & dining and earn a 50,000 point sign up bonus.
Even after the introduction of the Chase Sapphire Reserve, the Chase Sapphire Preferred is still a fantastic choice if you want to avoid the Reserve’s $450 annual fee, earn 2x on all travel & dining and earn a 50,000 point sign up bonus.